The switching behavior of large-scale electricity consumers in The Turkish electricity retail market

Abstract

This paper studies the effects of various economic and psychological factors on the switching behavior of large-scale electricity consumers in Turkey. Switching frequency and switching direction are two variables used to analyze switching behavior. The former is concerned with how often retailers change their suppliers. On the other hand, switching direction measures the direction of switching preferences of consumers between two electricity suppliers since the incumbent has a brand advantage over new suppliers that creates inertia and may reduce competition in the market. The target group of this study is large-scale electricity consumers rather than residential consumers since the switching activities of large-scale consumers are more competitive. We employ a five-point Likert scale questionnaire to construct eight psychological and economic factors to explain switching activities. The estimates indicate that improving service quality and providing essential services are the main motivations for switching decisions. Satisfaction with primary services, the homogeneity of the retail electricity market, and switching costs enhance the status quo; however, clarity of contracts and assistance for electricity distribution services (maintenance, metering, billing, etc.) affect the switching activities.